Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 308-319)

MR JOHN EDWARDS, MS HEATHER HANCOCK AND MR IAN PIPER

TUESDAY 5 MARCH 2002

Chairman

  308. Can I welcome you to the last session this morning and ask you to identify yourselves for the record.
  (Mr Edwards) I am John Edwards, Chief Executive of Advantage West Midlands, the regional development agency for the West Midlands.

  (Ms Hancock) I am Heather Hancock, Environment Director for Yorkshire Forward, the regional development agency for Yorkshire.
  (Mr Piper) I am Ian Piper. I am Head of Regeneration and Policy at the South West RDA.

  309. Do you want to say anything by way of introduction?
  (Mr Edwards) If I may, Chairman, just very briefly. You have had the submission from the East Midlands Development Agency on behalf of the RDAs so I will not duplicate that.

  310. Although we did wonder because it did seem to brush over one or two of the slight differences of emphasis.
  (Mr Edwards) We agree on most things, Chairman. To set out for the Committee's benefit, the RDAs have been in existence now since April 1999 and brought together 11 separate funding streams, four different organisations and we have five key purposes: promoting economic development and regeneration; improving skills; increasing competitiveness; reducing unemployment; and promoting sustainable development. So from the outset, the regional development agencies have a strong economic regeneration remit and that was reinforced by the Chancellor of the Exchequer in March of last year when he gave the RDAs the role of leading economic regeneration in the English regions. We do now have a framework to deliver economic regeneration in the English regions called "regional economic strategies". Each region has one and they reflect the differences and the similarities within and between regions. We do regard brownfield development as a key tool in delivering sustainable development and sustainable economic regeneration, but we deliver it in the framework of the regional economic strategies and we do focus the bulk of our resources in the urban regeneration agenda, in leading that agenda, on brownfield development. It is unfair and wrong to say that the RDAs promote greenfield development.

Miss McIntosh

  311. In regard to the five main programmes that were envisaged when the RDAs were set up, are you supporting projects through each of them and how?
  (Mr Edwards) When you say the five, do you mean the five new programmes?

  312. The five under the Single Regeneration Budget.
  (Mr Edwards) We have continued to deliver the programmes and projects that we inherited when the regional development agencies were formed. I think it is fair to say that in the first two years of the regional development agencies' life, that has been predominantly what we have done.

Chairman

  313. But those are basically the old schemes, are they not?
  (Mr Edwards) Those are basically the old programmes.

  314. So what we are after is how of the many new schemes are you supporting?
  (Mr Edwards) From the 1st April 2002 we have a single pot of funding which allows the regional development agencies to use their resources in line with the drivers set out in the regional economic strategies and, in doing that, we will support enterprise development, we will support land and property programmes, we will urban regeneration, business development, inward investment, and programmes to improve and increase the skills of the regions.
  (Ms Hancock) It might be helpful just to give some figures around that. If we look at the budget that we are working for land and property in Yorkshire and the Humber region, it is about £57 million and of that, 26 per cent of it is inherited largely PIP-style schemes, about 55 per cent of it is what is broadly in the compass of English development and between 15 and 20 per cent is on the new kind of interventions under the five new schemes.
  (Mr Piper) In South West, the comparable figures are a land and property budget of about £45 million for this year, of which 75 per cent approximately is being spent on Direct Development. PIP survivors are about 2 to 3 per cent.

  315. What about replacements to PIP?
  (Mr Piper) The replacement schemes, obviously Direct Development was one of those and we are using that as a primary tool. We are now starting to see some schemes coming through, using the new gap funding schemes, though they have been quite slow in coming through, but we are actually dealing with two or three of those at the moment and we have been using the environmental and the community regeneration schemes as well.

Miss McIntosh

  316. Those are the figures for this year?
  (Mr Piper) Yes.

  317. How do they compare with two years ago and how do they compare to your forecasts for the next two years' time?
  (Mr Edwards) If I can deal with the figures for the West Midlands, in the first year of the RDAs' establishment, 1999/2000, our land and property budget was around £30 million. Of that, £23 million was the gap funding programme and just over £6.5 million was Direct Development, so the bulk of it was focused on delivering the inherited gap funding programmes. For 2002/03, the coming financial year, our current predicted land and property budget is close to £48 million, so we are seeing an increase in the amount of resources devoted to land and property. About half of that will be dealing still with the inherited gap funding programmes and the other half will be supporting Direct Development. At the moment we are using Direct Development as the primary tool largely assembling rather difficult sites and ones which need remediation.

  318. Do you think in terms of the impact on your budget that there has been a disproportionate effect of gap funding ceasing to be on previous schemes on UK RDA budgets to regional budgets elsewhere in the European Union?
  (Mr Edwards) I do not think any of us can comment really on budgets elsewhere in the European Union. We looked at 27 PIP schemes approved under the old programme and of those 27 PIP schemes, 14 would be ineligible under the new programme, 13 we could still do and they were ineligible because they were predominantly housing or the levels of intervention were above the rates at which we can now currently intervene. Our estimates are that it would take approximately three times as much resource to deliver the same output in Direct Development if you took it to its conclusion and you completed the development as it would if one used the gap funding scheme. I think that is rather a blunt way of approaching it because we would not see, I do not believe, certainly not in the West Midlands, the regional development agencies, except in very exceptional circumstances, doing other than land assembly, remediation and then make the completed site available to the private sector and other developers to take forward.

Chairman

  319. So actually you are saying that without the gap funding schemes, really you need three times as much money as you have got?
  (Mr Edwards) What I am saying is that to deliver the end result, if the public bodies like the RDAs were to take a development through to its conclusion, we would need at least three times the budget that we have currently got.


 
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